Fair Trade-Fair Labor: The missing development framework in a globalizing ASEAN economy*
Wigberto Tañada, Lead Convenor
We, at the Fair Trade Alliance (FairTrade), are pleased to be a co-sponsor of this Inter-University Conference, which seeks a deeper discussion of the social and human dimension of regional integration, a process inextricably linked with globalization. We join our brothers and sisters from the UNI Global Union and other civil societies in their call for a people-centered regional integration. We commend the socially-committed academics and scholars for bringing about a Conference focused on People Solidarity and involving representatives of the working people as direct participants. Together, we can help shape the social and labor rules of regional integration to make the process inclusive, broad-based and pro-people.
Yes, ASEAN or the Association of Southeast Asian Nations is fast integrating, in fact, it is hailed as the core of an emerging East Asian economy, which includes China, the new economic dragon of Asia, and Japan, the original Asian dragon, and the tiger economy of South Korea.
And yet, recent reports of the UNDP and the ILO tell us that East Asia, Southeast Asia in particular, has been experiencing deeper inequality and rising unemployment under economic liberalization and globalization. Some countries are even experiencing jobless growth. Thus, the 2006 Asia-Pacific Human Development Report: Trade on Human Terms of the UNDP posed the following:
…the region has embraced free trade, but has free trade embraced the poor?
This development is vividly illustrated by the present food crisis being experienced by the Filipino poor, urban and rural, due to ill-advised World Bank policy of deregulating and liberalizing agriculture, which has been enthroned in the last 25 years or so. Today, the Philippines, from a net rice exporter in the late l970s, has become the number one global importer of rice.
Likewise, the Philippines has been experiencing a pattern of jobless growth, as it has become dependent on a few growth industries such as IT/ICT and electronics while losing all other industries, from shoe and textile production to tire and steel manufacturing.
To a certain extent, this phenomenon of hollowing out of the economy – the shrinking of industry and agriculture — has led to similar patterns of jobless growth and rising unemployment in other ASEAN and Asian countries, with the exception of a few robust economies. As the UNDP and ILO put it, this is the reason reason why some countries in the region have become vendors of global services, meaning providers of migrant labor, those who do the SALEF jobs – shunned by all except by a very few.
The challenge, clearly, is how to put people at the center of development in a liberalizing and globalizing ASEAN.
But how do we do that?
First, we, at the Fair Trade Alliance believe that there is a need for the ASEAN to take a pause in its drive to single-mindedly push for trade and economic liberalization wholesale across the region – through the AFTA-CEPT, the 12 Priority Integration Projects (PIPs), the ASEAN Framework Agreement on Services (AFAS) and the ASEAN Investment Agreement (AIA), which are all supposed to culminate in the creation of an ASEAN Economic Community (AEC). This AEC liberalization project is further intensified by the highly-confusing and convoluted program of ASEAN members in concluding bilateral and regional free-trade agreements with China, with Japan, with the United States and with practically every so-called Dialogue Partner of the ASEAN. Where will all these intermeshing liberalization agreements lead to?
One thing is clear: the winners in this mad economic liberalization process are not the small farmers nor the small and medium businesses in each ASEAN member country for they do not even understand this project called AEC. The runaway winners are the transnational corporations (TNCs) from Japan, North America, Europe and within ASEAN itself for they can now move in and out of each ASEAN economy in search of markets, cheap labor, raw materials and so on. This has given rise to what an ADB study last year called as ‘Factory Asia’. And yet, the same study said that Factory Asia can not be equated with regional integration similar to what has happened in Europe.
The truth is that the rise of the TNCs, of Factory Asia, is accompanied by the contrasting outcome for many in the larger ASEAN society – the collapse of micro, small, medium and indigenous farmers, industrial producers and traders; the general weakening of the trade union movement because of the Regional Race to the Bottom, and the rising joblessness, poverty and underemployment in countries that have more losers than winners. Thus, instead of an integrated ASEAN, we have a socially-divided ASEAN.
Hence, the urgent challenge for the ASEAN Leaders and the ASEAN Secretariat is how to put people at the center of the integration process. To us, the answer is clear: adopt a Fair Trade-Fair Labor Development Framework (FTLDF).
What is the Fair Trade-Fair Labor Development Framework?
A Fair-Trade-Fair-Labor Framework believes in a free economy where all actors, especially the small ones, are given equal opportunity to compete and survive. But the espousal of a free economy should never be equated with the free trade dogma, which in reality does not guarantee economic freedom because it leads to an economic arrangement dominated by a few, the TNCs in particular.
In a free economy, the task is how to level the playing field for all. For example, in the pharmaceutical industry which is dominated by a few pharma TNCs, it is the duty of the government to level the playing field by shortening the lifetime of certain patents, encouraging generic producers to produce drugs needed by the larger population, or authorizing government agencies to engage in the parallel importation of cheaper drugs from other sources. Of course, leveling the playing field can vary from industry to industry. For example, in the case of the oil industry, the government is often the only one in a position to compete with the giant oil TNCs. It should not, therefore, allow the industry to be liberalized in the name of privatization. Ultimately, the job of the government is to calibrate protection and liberalization while encouraging national home producers to modernize and increase productivity.
Relatedly, leveling the playing field requires observance of the universal trade principle of special and differential treatment (SDT), a principle cited almost 150 times in the various WTO agreements and in the WTO Preamble itself. This principle states that not all countries are created equal and should be given some flexibility in calibrating their trade commitments with their development priorities. In particular, the SDT principle allows developing nation-states to push their own development agenda freely so that their societies can catch up with the more developed ones. For example, why should rice and corn, which are strategic staples and major sources of livelihood for many in the ASEAN, be subjected to a wholesale liberalization program? Even in Japan, rice is tightly regulated because it is both a political and cultural commodity. The SDT principle, unfortunately, is not well ventilated in the ASEAN economic programming given the dominant liberalization framework in the region.
Thirdly, the Fair-Trade-Fair-Labor Framework insists on the universal observance of basic or internationally-recognized labor, human and environmental rights of peoples and societies. Such rights should be observed in all countries without exception. For when exceptions are made, they become an occasion for the general lowering of social and labor standards in the vague name of global and regional competition. This is what the trade unions call as a Race to the Bottom.
There are other principles in the framework we are advocating such as protection for the consumers, solidarity among small producers and people-to-people trade and economic networking within and across countries, topics that are hardly discussed within the ASEAN. Time constraint does not allow us to go into a deeper discussion of these principles. But hopefully, the various panels of this Conference can tackle them.
However, we would like to conclude by citing another major principle – giving society’s stakeholders a voice in the development process. The problem in the ASEAN is precisely the absence of people’s consultation and people’s participation in the integration process. The role of the millions of home-based producers and their organizations, the millions of workers and their unions, the millions of farmers and their associations, the numerous small agro-industrial producers in each country and other stakeholders in ASEAN society have no voice, no say in the integration process.
Yes, there have been some consultations here and there on human rights, on the ASEAN Charter, on the environmental haze and even on labor migration. These are positive developments. But these consultations are far too few and too limited compared to the scale of the ambitious ASEAN economic liberalization-integration project now underway.
We hope that this Conference shall be able to bring to the attention of the ASEAN Leaders and the ASEAN Secretariat the need for them to take a historic pause in the ongoing liberalization-integration program, and allow in the name of democratic consultation and people’s participation, a modification, if not overhaul, of the one-sided liberalization development model that is in place. Narrow liberalization is not a formula for social and economic integration. It is a blueprint for continuing poverty, inequality and division in the region.
Indeed, let us put the people back in the center of the integration process.
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* Read by Ms. Mars Mendoza, FairTrade Deputy Executive Director at the 8th ASEAN Inter-University Conference on Social Development — May 28, 2008, Century Park Hotel, Manila